Exhibit J
EXECUTION COPY
STOCKHOLDER AGREEMENT
STOCKHOLDER AGREEMENT (this "AGREEMENT"), dated as of June 9, 2002, by
and among EarthLink, Inc., a Delaware corporation ("PARENT"), EL Sub, Inc., a
Delaware corporation ("PURCHASER") and a wholly owned subsidiary of Parent, and
the individual listed on the Signature Page hereto (the "STOCKHOLDER").
WHEREAS, the Stockholder is, as of the date hereof, the record and
beneficial owner of the shares of common stock, par value $0.0001 per share
("COMPANY COMMON STOCK"), of PeoplePC Inc., a Delaware corporation (the
"COMPANY"), set forth on the Signature Page hereto;
WHEREAS, Parent, Purchaser and the Company concurrently herewith are
entering into an Offer Agreement, dated as of the date hereof (the "OFFER
AGREEMENT"; capitalized terms used but not defined herein have the meanings
ascribed to such terms in the Offer Agreement), which provides, among other
things, for the acquisition of the Company by Parent by means of a cash tender
offer (the "OFFER") by Purchaser for all of the outstanding shares of Company
Common Stock and for the subsequent merger (the "MERGER") of Purchaser with and
into the Company upon the terms and subject to the conditions set forth in the
Offer Agreement; and
WHEREAS, as a condition to the willingness of Parent and Purchaser to
enter into the Offer Agreement, and in order to induce Parent and Purchaser to
enter into the Offer Agreement, the Stockholder has agreed to enter into this
Agreement.
NOW, THEREFORE, in consideration of the execution and delivery by
Parent and Purchaser of the Offer Agreement and the foregoing and the mutual
representations, warranties, covenants and agreements set forth herein and
therein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Representations and Warranties of the Stockholder. The
Stockholder (i) is the beneficial owner of the shares of Company Common Stock
and the options and warrants to purchase shares of Company Common Stock
indicated on the Signature Page hereto, free and clear of any liens, claims,
options, rights of first refusal, co-sale rights, charges or other encumbrances
that, in each case, would deprive Parent of the benefits of this Agreement; (ii)
does not beneficially own any securities of the Company other than the shares of
Company Common Stock and options and warrants to purchase shares of Company
Common Stock indicated on the Signature Page hereto; and (iii) has full power
and authority to make, enter into and carry out the terms of this Agreement and
the proxy contained herein.
SECTION 2. Purchase and Sale of the Shares. (a) The Stockholder hereby
agrees that he shall tender his Shares (as defined in Section 2(b)) into the
Offer, and that the Stockholder shall not withdraw any
Shares so tendered unless (i) the Offer is terminated or has expired or (ii)
this Agreement is terminated pursuant to Section 6 hereof; PROVIDED, HOWEVER,
that nothing in this Agreement shall require Stockholder to tender shares of
Company Common Stock into the Offer to the extent that such tender would cause
the Stockholder to incur liability under the provisions of Section 16(b) of the
Securities Exchange Act of 1934, as amended. Purchaser hereby agrees to purchase
all the Shares so tendered at a price per Share equal to the Offer Price;
PROVIDED, HOWEVER, that Purchaser's obligation to accept for payment and pay for
the Shares in the Offer is subject to all the terms and conditions of the Offer
set forth in the Offer Agreement and Annex A thereto.
(b) "SHARES" shall mean: (i) all securities of the Company (including
all shares of Company Common Stock and all options, warrants and other rights to
acquire such securities) beneficially owned by the Stockholder as of the date of
this Agreement; and (ii) all additional securities of the Company (including all
shares of Company Common Stock and all additional options, warrants and other
rights to acquire such securities) of which the Stockholder acquires beneficial
ownership during the period from the date of this Agreement through the
Effective Time. In the event of a stock dividend or distribution, or any change
in Company Common Stock by reason of any stock dividend, split-up,
recapitalization, combination, exchange of shares or the like, the term "SHARES"
shall be deemed to refer to and include the Shares as well as all such stock
dividends and distributions and any securities into which or for which any or
all of the Shares may be changed or exchanged or which are received in such
transaction.
SECTION 3. Transfer of the Shares. Prior to the termination of this
Agreement, except as otherwise provided herein, the Stockholder shall not: (i)
transfer (which term shall include, without limitation, for the purposes of this
Agreement, any sale, gift, pledge or other disposition), or consent to any
transfer of, any or all of the Shares; (ii) enter into any contract, option or
other agreement or understanding with respect to any transfer of any or all of
the Shares or any interest therein; (iii) grant any proxy, power-of-attorney or
other authorization or consent in or with respect to the Shares; or (iv) deposit
the Shares into a voting trust or enter into a voting agreement or arrangement
with respect to the Shares. Notwithstanding the foregoing, the Stockholder may
transfer his Shares so long as each person to which any of such Shares or any
interest in any of such Shares is or may be transferred shall have (a) executed
a counterpart to this Agreement and (b) agreed to hold such Shares or interest
in such Shares subject to all of the terms and provisions of this Agreement.
SECTION 4. Grant of Irrevocable Proxy; Appointment of Proxy.
(a) Subject to Section 6 hereof, the Stockholder hereby irrevocably
grants to, and appoints, Parent and any nominee thereof, its proxy and
attorney-in-fact (with full power of substitution), for and in the name, place,
and stead of the Stockholder, to vote his Shares, or grant a consent or approval
in respect of his Shares, in connection with any meeting of the stockholders of
the Company (i) in favor of the Merger, and (ii) against any action or agreement
which would impede, interfere with or prevent the Merger, including any
Acquisition Proposal. This Agreement is intended to bind the
Stockholder as a stockholder of Company only with respect to the specific
matters set forth herein.
(b) The Stockholder represents that any proxies heretofore given in
respect of the Shares are not irrevocable, and that such proxies are hereby
revoked.
(c) Subject to Section 6 hereof, the Stockholder hereby affirms that
the proxy set forth in this Section 4 is irrevocable and is given in connection
with the execution of the Offer Agreement, and that such irrevocable proxy is
given to secure the performances of the duties of the Stockholder under this
Agreement. The Stockholder hereby further affirms that the irrevocable proxy
granted hereby is coupled with an interest in the Shares and, except as set
forth in Section 6 hereof, is intended to be irrevocable in accordance with the
provisions of Section 212(e) of the Delaware General Corporation Law.
SECTION 5. Further Assurances. The Stockholder shall, upon request of
Parent or Purchaser, execute and deliver any additional documents and take such
further actions as may reasonably be deemed by Parent or Purchaser to be
necessary to carry out the provisions hereof and to vest in Parent the power to
vote the Shares as contemplated by Section 4 hereof.
SECTION 6. Termination. Except as otherwise provided in this Agreement,
this Agreement, and all rights and obligations of the parties hereunder,
including the proxy delivered herein, shall terminate immediately upon the
earlier of (i) the termination of the Offer Agreement in accordance with its
terms or (ii) the Effective Time; PROVIDED, HOWEVER, that Sections 7 and 9 shall
survive any termination of this Agreement.
SECTION 7. Expenses. All fees and expenses incurred by any one party
hereto shall be borne by the party incurring such fees and expenses.
SECTION 8. Public Announcements. Each of the Stockholder, Parent and
Purchaser agrees that it will not issue any press release or otherwise make any
public statement with respect to this Agreement or the transactions contemplated
hereby without the prior consent of the other party, which consent shall not be
unreasonably withheld or delayed; PROVIDED, HOWEVER, that such disclosure can be
made without obtaining such prior consent if (i) the disclosure is required by
law, and (ii) the party making such disclosure has first used its best efforts
to consult with the other party about the form and substance of such disclosure.
SECTION 9. Miscellaneous.
(a) Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law, or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated herein are not affected in any manner materially
adverse to any party hereto. Upon such determination that any term or other
provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in a mutually acceptable manner.
(b) Binding Effect and Assignment. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; PROVIDED THAT, except as specifically
provided herein, no party to this Agreement may assign, delegate or otherwise
transfer any of its rights or obligations under this Agreement without the prior
written consent of the other parties hereto.
(c) Amendments and Modification. Except as may otherwise be provided
herein, any provision of this Agreement may be amended, modified or waived by
the parties hereto if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by the parties hereto, and in the case of a
waiver, by the party against whom the waiver is to be effective.
(d) Specific Performance; Injunctive Relief. The parties hereto
acknowledge that Parent shall be irreparably harmed and that there shall be no
adequate remedy at law for a violation of any of the covenants or agreements of
the Stockholder set forth herein. Therefore, it is agreed that, in addition to
any other remedies that may be available to Parent upon any such violation,
Parent shall have the right to enforce such covenants and agreements by specific
performance, injunctive relief or by any other means available to Parent at law
or in equity without the necessity of proving the inadequacy of money damages as
a remedy.
(e) Notices. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement to any
party hereunder shall be in writing and deemed given upon (a) personal delivery,
(b) transmitter's confirmation of a receipt of a facsimile transmission, (c)
confirmed delivery by a standard overnight carrier or when delivered by hand or
(d) when mailed in the United States by certified or registered mail, postage
prepaid, addressed at the following addresses (or at such other address for a
party as shall be specified by notice given hereunder):
If to Parent or Purchaser: Earthlink. Inc.
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxx XxXxxxxx, General Counsel
Facsimile No.: (000) 000-0000
With a copy to: Hunton & Xxxxxxxx
Bank of America Plaza, Suite 1400
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Tinley Xxxxxxxx
Facsimile No.: (000) 000-0000
If to the Stockholder: To the address for notice set forth on the
signature page hereof.
With copies to: Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
Professional Corporation
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
and
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
Professional Corporation
Xxx Xxxxxx
Xxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
(f) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware (regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof)
as to all matters, including, but not limited to, matters of validity,
construction, effect, performance and remedies.
(g) Entire Agreement. This Agreement constitutes the entire agreement
among the parties hereto with respect to the subject matter hereof and
supersedes all other prior agreements or understandings, both written and oral,
between the parties or any of them with respect to the subject matter hereof.
(h) Effect of Headings. The article and section headings contained in
this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties hereto and shall not in any way affect the meaning or
interpretation of this Agreement.
(i) Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be deemed an original, with the same effect as
if the signatures thereto and hereto were upon the same instrument.
(j) Action in Stockholder Capacity Only. The Stockholder makes no
agreement or understanding herein in any capacity other than his capacity as a
record holder and beneficial owner of Shares and nothing herein shall limit or
affect any action taken in any other capacity as an officer or director of the
Company.
(k) No Exercise of Options, Warrants or Other Rights. Notwithstanding
any provision of this Agreement to the contrary, nothing in this Agreement shall
require the Stockholder to exercise or convert Shares that do not constitute
outstanding shares of Company Common Stock.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
The foregoing Agreement is hereby executed as of the date first above
written.
"PARENT"
EARTHLINK, INC.,
a Delaware corporation
By:
-----------------------------------
Name:
Title:
"MERGER SUB"
EL SUB, INC.,
a Delaware corporation
By:
------------------------------------
Name:
Title:
"STOCKHOLDER"
Signed: SOFTBANK CAPITAL PARTNERS LP
By: SOFTBANK CAPITAL PARTNERS LLC,
its General Partner
Signed:
----------------------------
Name:
Address:
SHARES BENEFICIALLY OWNED:
____________ shares of Company Common
Stock
____________ shares of Company Common
Stock issuable upon exercise of
options
____________ shares of Company Common
Stock issuable upon exercise of
warrants
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"STOCKHOLDER"
Signed: SOFTBANK CAPITAL LP
By: SOFTBANK CAPITAL PARTNERS LLC,
its General Partner
By:
------------------------------
Name:
Title:
Address:
SHARES BENEFICIALLY OWNED:
____________ shares of Company Common
Stock
____________ shares of Company Common
Stock issuable upon exercise of options
____________ shares of Company Common
Stock issuable upon exercise of warrants
-3-
"STOCKHOLDER"
Signed: SOFTBANK CAPITAL ADVISORS FUND
LP
By: SOFTBANK CAPITAL PARTNERS LLC,
its General Partner
Signed:
--------------------------------
Name:
Address:
SHARES BENEFICIALLY OWNED:
____________ shares of Company Common
Stock
____________ shares of Company Common
Stock issuable upon exercise of options
____________ shares of Company Common
Stock issuable upon exercise of warrants
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